Trade Setup
Once the X and A points have been identified the market forms the B by fulfilling a precise 88.6% retracement of the XA leg. The term "precise" means that it is closer to one Fibonacci level than the other. Therefore, if the retracement is 1 pip more than 83.6% (halfway between 78.6% & 88.6%) then it is treated as 88.6%, if it is 1 pip less than 94.3% (halfway between 88.6% & 100%) then it is treated as 88.6%.
To summarise, the B point is valid if it lies between 83.6% and 94.3% XA.
The C point is valid if it touches at least a 38.2% retracement of the AB and it does not exceed the A point (100% AB).
The Potential Reversal Zone (PRZ) is calculated as a combination of the 161.8% extension of the XA level, 1.272AB=CD movement level (so the same distance as the 127.2% of the A-B leg but this should be copied across and measured from the C point) and finally, the corresponding BC extensions:
261.8% of the BC if the C-point is precise 38.2% of the AB,
224.0% of the BC if the C-point is precise 50%% of the AB,
200.0% of the BC if the C-point is precise 61.8% of the AB,
200.0% of the BC if the C-point is precise 70.7% of the AB,
1.618% of the BC if the C-point is precise 78.6% of the AB,
1.618% of the BC if the C-point is precise 88.6% of the AB.
Harmonic Deep Crab Target 1: 38.2% retracement of the AD leg.
Harmonic Deep Crab Target 2: 61.8% retracement of the AD leg.
Harmonic Deep Crab Stops: 213% extension of the XA.
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